PARIS -- Goodyear Tire & Rubber Co. (IW 1000/192) said on Thursday that it was set to close a loss-making plant in Amiens, northern France, which employs 1,173 workers, following a long struggle with trades unions.
"Closing the factory is the only option after five years of unsuccessful negotiations," said a statement issued by Goodyear Dunlop Tires France.
It added that the plan had been presented to a works committee and would be the basis of talks with workers' representatives.
Chairman Henry Dumortier said: "We are fully aware of the impact of the announcement we are making today and the plan's heavy consequences for staff, their families and local communities."
He added: "We are deeply disappointed that five years of negotiations were not enough to reach a compromise with representatives of workers at Amiens Nord. Today's announcement was the only option left to us."
Production of low-end tires for passenger vehicles and farm equipment at the plant resulted in a loss in 2011 of 61 million euros (US$83 million) according to Goodyear figures.
The decision was taken against a background of weaker demand for autos that threatens 20,000 jobs in France, where the new government has vowed to stem rising unemployment this year.
In addition to Goodyear, automakers Peugeot Citroen and Renault have announced restructuring programs that combined could see almost 19,500 jobs eliminated by 2016.
Franck Jurek, a leader of the CGT trade union at the Goodyear plant, said: "We have been battling for six years against 400, 800, 1,200 job cuts, we are going to keep fighting."
A new works committee meeting was scheduled for February 12, the CGT said, while forecasting a big turnout by workers.
Goodyear said that closing the tire plant was a decision "aimed at remaining competitive in the tourism and agricultural sectors."
A spokesman told Dow Jones Newswires the company faced "a very difficult economic situation with tough competition from Asian countries and a constant decline in demand."
Hit to the French Economy
French President Francois Hollande had paid a visit to the Amiens factory during his electoral campaign, calling for more workers rights, in cases where companies were still making profits.
His administration now faces multiple job-cutting plans including those by Peugeot Citroen and Renault as the auto sector struggles to get to grips with serious surplus capacity amid slumping sales.
Amiens Mayor Gilles Demailly, a member of Hollande's Socialist Party, called Goodyear's decision "unacceptable" and said he wanted to meet with Industrial Renewal Minister Arnaud Montebourg to discuss what had become a "national issue."
"Announcing the plant's complete closure is even worse than we could have imagined," the Amiens mayor said, before warning that the city's industrial zone "will be largely decapitated."
French job cuts also loom on the horizon in the steel, chemical and retail sectors, while the number of unemployed already stands at 3.13 million people, around 10% of the workforce.
The CGT vowed to mobilize Goodyear workers from all over France for the next works committee meeting, which is to take place at the group's French headquarters in Rueil-Malmaison, west of Paris.
Accusing the Goodyear management of "lying right from the start," CGT leader Mickael Wamen said staff at the Amiens site would be on strike on February 12, and "we will come here with all of Goodyear's workers."
He claimed that "Goodyear has no legal chances" of closing the tire plant.
On Tuesday, a French appeal court suspended the Peugeot restructuring plan that concerns 8,000 jobs because the group had not fully informed staff representatives at its auto parts unit Faurecia of the plan's details.
Copyright Agence France-Presse, 2013